§ 27-46-4. Risk retention groups not chartered in this state.
Risk retention groups chartered and licensed in states other than this state and seeking
to do business as a risk retention group in this state shall comply with the laws
of this state as follows:
(1) Notice of operations and designation of commissioner as agent.(i) Before offering insurance in this state, a risk retention group shall submit to the
commissioner:
(A) A statement identifying the state or states in which the risk retention group is chartered
and licensed as a liability insurance company, charter date, its principal place of
business, and any other information, including information on its membership, that
the commissioner of this state may require to verify that the risk retention group
is qualified under §â€‚27-46-2(11);
(B) A copy of its plan of operations or feasibility study and revisions of the plan or
study submitted to the state in which the risk retention group is chartered and licensed;
provided, that the provision relating to the submission of a plan of operation or
feasibility study shall not apply with respect to any line or classification of liability
insurance which:
(I) Was defined in §â€‚15 U.S.C. 3901 et seq. before October 27, 1986; and
(II) Was offered before that date by any risk retention group that had been chartered and
operating for not less than three (3) years before that date;
(ii) The risk retention group shall submit a copy of any revision to its plan of operation
or feasibility study required by §â€‚27-46-3(b) at the same time that the revision is submitted to the commissioner of its chartering
state; and
(iii) The risk retention group shall submit a statement of registration that designates
the commissioner as its agent for the purpose of receiving service of legal documents
or process;
(2) Financial condition. Any risk retention group doing business in this state shall submit to the commissioner:
(i) A copy of the group's financial statement submitted annually to the state in which
the risk retention group is chartered and licensed which shall be certified by an
independent public accountant and contain a statement of opinion on loss and loss
adjustment expense reserves made by a member of the American Academy of Actuaries
or a qualified loss reserve specialist, under criteria established by the National
Association of Insurance Commissioners;
(ii) A copy of each examination of the risk retention group as certified by the commissioner
or public official conducting the examination;
(iii) Upon request by the commissioner, a copy of any information or document pertaining
to any outside audit performed with respect to the risk retention group; and
(iv) Any information that may be required to verify its continuing qualification as a risk
retention group under §â€‚27-46-2(11);
(3) Taxation.(i) Each risk retention group shall be liable for the payment of premium taxes and taxes
on premiums of direct business for risks resident or located within this state, and
shall report to the commissioner the net premiums written for risks resident or located
within this state. The risk retention group shall be subject to taxation, and any
applicable fines and penalties related to taxation, on the same basis as a foreign
admitted insurer;
(ii) To the extent licensed agents or brokers or insurance producers are utilized pursuant
to §â€‚27-46-12, they shall report to the commissioner the premiums for direct business for risks
resident or located within this state which those licensees have placed with or on
behalf of a risk retention group not chartered in this state;
(iii) To the extent that insurance agents or brokers or producers are utilized pursuant
to §â€‚27-46-12, the agent or broker or insurance producers shall keep a complete and separate record
of all policies procured from each risk retention group, which record shall be open
to examination by the commissioner. The total cost of the examinations shall be paid
for in the same manner as set forth in §â€‚27-13-1. These records shall, for each policy and each kind of insurance provided under them,
include the following:
(A) The limit of liability;
(B) The time period covered;
(C) The effective date;
(D) The name of the risk retention group which issued the policy;
(E) The gross premium charged; and
(F) The amount of return premiums, if any;
(4) Adherence to fair claims settlement practices. Any risk retention group, its agents, and representatives shall comply with any law
or regulations regarding claims settlement practices;
(5) Deceptive, false, or fraudulent practices. Any risk retention group shall comply with and be subject to the laws of this state
regarding deceptive, false, or fraudulent acts or practices;
(6) Examination regarding financial condition. Any risk retention group must submit to an examination by the commissioner to determine
its financial condition if the commissioner of the jurisdiction in which the group
is chartered and licensed has not initiated an examination or does not initiate an
examination within sixty (60) days after a request by the commissioner of this state.
Any examination shall be coordinated to avoid unjustified repetition and conducted
in an expeditious matter and in accordance with the NAIC's examiner handbook. The
total cost of the examination shall be paid for in the same manner as set forth in
§â€‚27-13-1;
(7) Notice to purchasers. Every application form for insurance from a risk retention group, and every policy,
on its front and declaration pages, issued by a risk retention group, shall contain
in ten point type the following notice:
NOTICE
THIS POLICY IS ISSUED BY YOUR RISK RETENTION GROUP. YOUR RISK RETENTION GROUP MAY
NOT BE SUBJECT TO ALL OF THE INSURANCE LAWS AND REGULATIONS OF YOUR STATE. STATE INSURANCE
INSOLVENCY GUARANTY FUNDS ARE NOT AVAILABLE FOR YOUR RISK RETENTION GROUP.
(8) Prohibited acts regarding solicitation or sale. The following acts by a risk retention group are prohibited:
(i) The solicitation or sale of insurance by a risk retention group to any person who
is not eligible for membership in the group; and
(ii) The solicitation or sale of insurance, by, or operation of, a risk retention group
that is in hazardous financial condition or financially impaired;
(9) Prohibition on ownership by an insurance company. No risk retention group shall be allowed to do business in this state if an insurance
company is directly or indirectly a member or owner of the risk retention group, other
than in the case of a risk retention group all of whose members are insurance companies;
(10) Prohibited coverage. The terms of any insurance policy issued by any risk retention group shall not provide,
or be construed to provide, coverage prohibited generally by statute of this state
or declared unlawful by the highest court of this state whose law applies to the policy;
(11) Delinquency proceedings. A risk retention group not chartered in this state and doing business in this state
shall comply with a lawful order issued in a voluntary dissolution proceeding or in
a delinquency or liquidation proceeding commenced by the state insurance commissioner
if there has been a finding of financial impairment after an examination under subsection
(6) of this section; and
(12) Penalties. A risk retention group that violates any provision of this chapter will be subject
to fines and penalties including revocation of its right to do business in this state,
applicable to licensed insurers generally.